Student Identification Number: 68 ECONOMIC DEVELOPMENT | SPRING 2014

Update to the Economic Development Strategy, Jordan Downs Housing Redevelopment Client: HACLA, Master Developer Los Angeles, CA

Re:Working Jordan Downs PLANNING ECONOMIC DEVELOPMENT FOR A COMMUNITY MOVING FORWARD

“LOCAL ECONOMIC DEVELOPMENT IS ACHIEVED

WHEN A COMMUNITY’S STANDARD OF LIVING

CAN BE PRESERVED AND INCREASED THROUGH A

PROCESS OF HUMAN AND PHYSICAL

DEVELOPMENT THAT IS BASED ON PRINCIPLES OF

EQUITY AND SUSTAINABILITY.”

- BLAKELY & LEIGH, PLANNING LOCAL ECONOMIC

DEVELOPMENT (2010)

EXECUTIVE SUMMARY

Jordan Downs resides in an area with the largest

concentration of public housing west of the Mississippi. As

part of an ambitious effort to improve the affordable housing

dynamics for families across Los Angeles, the Jordan Downs

redevelopment seeks to catalyze change in Watts through this

four-phased development that includes a mix of residential

and commercial functions in a sustainable and healthy

environment.

This experimental, mix-income development has a number of

obstacles that it must overcome for success; many of these

obstacles relate to the economic and social fabric of the area,

which has been impacted by significant disinvestment over

the years. By surveying the community’s assets and critically

analyzing the state of the Community Master Plan, it becomes

clear that the plan fails to map the pathway for economic

redevelopment of the area, revealing challenges currently left

unaddressed and opportunities that may not be realized.

Jordan Downs possesses distinctions from other public

housing redevelopments across the country, but a historical

review of public housing and mix-income conversion in the

United States highlight the importance of planning for

economic development and growth. Previous case studies

reveal that while the provision of improved housing will surely

ignite a wider redevelopment effort in the neighborhood of

Watts, it is important to recognize that conditions must be

created to facilitate the successful transition of this

community from a socio-economically and geographically

isolated cluster of poverty into a thriving mix-income

community. Like many past projects of its type, although the

Master Plan has a clear vision and development objectives, it

is less obvious how this sustainable housing development will

be accompanied by sustainable economic development.

This report seeks to suggest a number of ways that the

community of Jordan Downs can seize the moment of

opportunity that results from new development while

promoting long-term economic independence of its residents.

Focusing on institutional capacity building, human capital

development, small business development and

entrepreneurship, and the creative mobilization of local and

regional assets, the recommendations in this report are

intended to facilitate the fulfillment of a core set of economic

development objectives:

Stimulate private investment while promoting community ownership.

Build institutional capacity for community-based economic change

Create revenue and employment generating opportunities on the Jordan Downs site

PART I: Introduction and Problem Framing

The Jordan Downs Redevelopment Increasing densification across Los Angeles is presenting new opportunities for dense, mix-use, mix-income, and livable communities. The Jordan Downs Redevelopment Initiative is at the forefront of this opportunity, with a Master Plan that seeks to catalyze change in the Watts area by reinvisioning affordable housing and community improvement.

Part of a larger effort initiated by former Mayor Antonio Villaraigosa to solve the affordable housing crisis in Los Angeles, the project is symbolic of revitalized efforts in Los Angeles and around the country to replace old public housing stock with bustling mix-income communities.

Project Site The project at Jordan Downs is an ambitious, mix-use, mix- income development. In addition to the one-to-one replacement of the current 700 public housing units, 700 units will be added to the site, featuring a mix of architectural styles and designs. Due to the creative phasing process the developer is utilizing, all current residents will be remain on site and will be redistributed around the development as it is being built. At 106.4 acres, the development also includes the

designation of 100,000 square feet of retail/commercial space, or otherwise designated “employment land”.

Contextualizing Redevelopment at Jordan Downs: Local and Regional Trends Local Trends: Jordan Downs Redevelopment and Master Plan Jordan Downs is located in a site that has been plagued by its notoriety and infamy for crime, gang activity, and low educational and economic opportunity. However, recent efforts to improve the schooling system and law enforcement system is yielding positive progress for the residents of this community. Given the right attention and commitment, a number of regional trends poise this development for success.

Regional Trends: Los Angeles County and its Economy This project comes after a period of steep decline for the Los Angeles region, as evidenced by the relatively high poverty rates. A number of contracting industries, notably manufacturing and aerospace/defense, directly impacted the Jordan Downs area, which was originally conceived as an industrial enclave to support manufacturing defense activities.

Despite the recent and pro-longed decline, there are a number of trends that coincide neatly with the development of Jordan Downs. A renewed interest in inner city living has brought the children of baby boomers (and boomers and empty nesters themselves) out of the suburbs and back into the inner city, as people increasingly seek proximity to transit lines and the “buzz” that inner city amenities offer. The sub- prime mortgage crisis, it appears, has chipped away at the American fixation with single family homes, and demand for

apartments in the region are increasing markedly (Multi- Family Market Forecast, 2013). And, more importantly, there seems to be a shortage of supply with the last few years characterized by very little new development throughout Los Angeles County. The shortage of available housing is evident in the high cost of living and high rents in the County, where some spend upwards of 50% of annual income on rent. In the area surrounding Jordan Downs, this number approaches 49%, so the addition of units to the area will be welcomed. These are all positive indicators for the Jordan Downs redevelopment initiative.

The County has also begun aggressively pursuing the development of a number of critical sectors for future employment, which are of particular importance to the employment aspirations for residents. Notably industries in the area include Fashion, Entertainment/Emerging Media Technology, Analytical Instruments, Aerospace, Information Technology, Business Services, Food Manufacturing, and a variety of Green industries. As a traditional site for manufacturing production, Los Angeles County is poised to take advantage of a number of new technologies that are transforming the aforementioned industries, such as additive, advanced and green manufacturing. The new emphasis not only on product innovation but process innovation offers important opportunities for new job creation and industrial revitalization in Los Angeles County—and thus important opportunities for the residents of Jordan Downs given its proximity to large industrial areas.

Jordan Downs will also be well positioned to take advantage of LA’s transit revolution. A number of new lines are being constructed around the city and larger region, giving residents of Jordan Down direct access to the new economic and employment developments in the surrounding areas through their connection to the Blue Line.

Report Methodology This report is comprised of two parts. Part I features a critical analysis of the Master Plan and site location from a variety of perspectives in planning, included land use, transportation and economic development, and seeks to identify some key trends that may be impacting the development. The majority of this analysis is anchored in site visits, client interviews, demographic and socio-economic census data, as well other informing documents and market studies that have been conducted about the Jordan Downs development.

Building off of this analysis, Part II contains the proposed solutions and recommendations for enhancing the economic development aspect of the Master Plan. Part II begins with an overview of public housing and mix income housing in the United States in order to better understand what some of the general challenges have been associated with these developments. Using this analysis to inform the SWOT conducted in Part I, Part II will also feature the proposed vision, strategy and implementation plan for improving economic development outcomes at Jordan Downs.

Summary of Strengths, Weaknesses, Opportunities and Threats

Demographic

Strengths

Weaknesses

Opportunities

Threats

-High density area -Concentration of youth

-Racial tension resulting from diversity

-High poverty

-Burgeoning workforce because of school-age population

-Very low educational attainment for adult population

Land Use -Opportunity to create vibrant live-work community

-Limited availability of non- residential property for economic development

-Surrounding commercial/industrial zoned properties -Potential live/work

-Presence of non- contributing industrial parcels -High surrounding vacancy

Transportation -Located near major freeways for business -Nearby Metro station

-Poor circulation -Safety inhibits pedestrian/cycling transportation

-Create a walkable/bikeable community -High public transit usage

-Safety concerns -Pollution from proximity to major thoroughfares/ freeways

Cultural -Rich cultural institutions and vibrant social atmosphere -Proximity to Watts Towers

-Negative cultural capital associated with the Watts area -Difficult cultural and ethnic tensions within the community

-Re-Brand Watts and public housing in Jordan Downs

-Perpetuation of cultural baggage associated with the area

Economic Development

-Proximity to many markets -Access to industrial clusters in region -Entrepreneurship

-Welfare dependent population -Few employment generators (disinvestment) -Weak retail, especially in food -Unrecognized informal economy

-Creative re-use/upgrading of non-contributing industrial parcels -Take advantage of proximity to industrial activities -Designated land area for “employment” uses

-Inability to create long term economic self sufficiency -Create opportunities that cater to a range of skills -Newly developed retail district nearby

Demographics Figure 1 gives an aerial view of the census tracts that were selected for analysis. The U-shaped lot represents the site area, and the communities to the north-west and south represent the direct neighborhood. The tract that represents the eastern border of the site area was not selected as part of the demographic analysis, as this tract primarily contains industrially zoned parcels that feature commercial enterprises. As such, it did not prove helpful in better contextualizing the demographics of the Jordan Downs population surrounding community.

FIGURE 1 - CENSUS TRACTS 2420, 2421, 2430 (SOURCE: SOCIAL EXPLORER)

FIGURE 2 – AGE DISTRIBUTION OF TRACTS VS LOS ANGELES COUNTY (SOURCE: SOCIAL

EXPLORER)

The primary strength and opportunity in terms of the demographics of Jordan Downs lies in the age distribution of the community, which features a much younger population than the average in the County of Los Angeles. This represents an important opportunity from an economic development perspective, as the availability of human capital increasingly determines locational attractiveness to industry and employers (Blakely & Leigh, 2010).

Undoubtedly the primary weaknesses and threats of this community pertain to the low educational attainment, as demonstrated by Figure 3, and the high concentration of poverty in the area, which boasts a population where 48.5% of individuals are living below the poverty line, compared to just over 24% in the County of Los Angeles (ACS, 2012). The

AGE DISTRIBUTION

All Tracts LA County

16.0% 14.0% 12.0% 10.0%

8.0% 6.0% 4.0% 2.0% 0.0%

Under 5 to 9 10 to 15 to 18 to 25 to 35 to 45 to 55 to 65 to 75 to 85 5

Years Years 14 17 24 34 44 54 64 74 84 Years

Years Years Years Years Years Years Years Years Years and

2 demonstrates, one of the largest age groups are people under 18, making this an ideal time to implement a robust school to work program at Jordan High School.

Land Use The Master Plan has been constructed to take place in a space with a particularly unique combination of zoning, which includes residences, a school, an urban garden, and commercial and industrial land.

FIGURE 3 – EDUCATIONAL ATTAINMENT IN TRACTS VS LA COUNTY (SOURCE: SOCIAL

EXPLORER )

median annual income is just over $10,000, signifying the gravity of the situation. Moreover, while there is a young

population in the Jordan Downs area which represents a rich potential workforce, without the right educational and employment interventions this population risks reflecting current trends of workforce underutilized, as the current labor force participation in the area is only around 50%, compared to the County of Los Angeles at just over 61% (ACS, 2012).

In order to take advantage of this burgeoning workforce, rigorous strategies must be implemented that incorporate job training and readiness. These programs must integrate the local high school students and community colleges. As Figure

While this combination of land uses may initially be considered a weakness for the project, the mix of uses is rare in dense urban communities now, and can be exploited to turn the site into a vibrant live-work community. If, for example, the currently non-participating industrial/commercially zoned parcels can be incorporated into the overall development plans, there is tremendous opportunity to create sources of employment directly next to residents, in addition

FIGURE 4 – LAND USE MAP (SOURCE: JORDAN DOWNS

MASTER PLAN)

EDUCATIONAL ATTAINMENT

LA County All Tracts

Doctorate degree

Professional school degree or more

Master's degree or more

Bachelor's degree or more

Some college or more

High School Graduate or more…

Less Than High School

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

to providing a site for on the site training and learning activities for the neighboring high school. From this perspective, there is great capacity to turn the Jordan Downs area into a high quality, middle class, work-live area. Figure 4 demonstrates this unique pairing of uses and reveals the potential for use that has already been considered by the Master Plan.

Transportation Another strength of the Master Plan is its aspiration to take advantage of the potential to transform Jordan Downs into a transit oriented development, due to its connection to the Blue Line and the relatively high public transit ridership rates for Watts residents vis-à-vis their Los Angeles County counterparts (Watts Community Studio, 2014). Moreover, the City and County of Los Angeles are currently planning to expand the Metro system around Los Angeles, which will increase the relative value of Watts being connected to the transit system as the region develops over the next 10 years. Going forward, the transportation plan could be more strongly connected to the economic development and retail aspirations for the area.

Cultural The Jordan Downs redevelopment is located in an area that possesses unique cultural resources in the form of civic, social and religious institutions and organizations; however, it also possesses unique cultural baggage, mostly stemming from Watts’ reputation as a poverty stricken and unsafe neighborhood. Despite this reputation, there are a number of rich socio-cultural institutions in the area, such as the Watts

Towers, which serve as an attraction for people around the world who visit Los Angeles. And while the area boasts a fairly long African American history, an influx of foreign born residents since the 1990’s has contributed to diversifying the cultural influences in the area, creating a rich atmosphere for residents and visitors. It is critical that in the process of “rebranding” the neighborhood that these cultural assets are routinely mapped and continuously updated so that cultural contributions can be maximized.

Economic Development Watts has been confronted with obstacles in stimulating economic development in this area. The high concentration of public housing, chronic disinvestment, and lack of employment opportunities has rendered the Jordan Downs community and the surrounding area largely welfare dependent. This may prove a challenge for encouraging private investment in the area, in addition to providing obstacles in attracting renters for the market-rate units that will be part of the new development. One oversight of the Master Plan is that it does not account for a long-term strategy for initiating economic transformation in the area, and it does not address how the development plans to attract a range of skill levels and incomes to the property. While the housing development will undoubtedly be attractive and will ensure a high quality of amenities, its success is dependent on its ability to attract the right mix of tenants.

FIGURE 5 - OCCUPANCY STATUS AT CENSUS TRACTS (SOURCE: SOCIAL EXPLORER)

As it is, Figure 5 demonstrates the already elevated vacancy rates, and while the occupancy rates at Jordan Downs are high, the high vacancy rate of the surrounding neighborhood is a negative indicator for strong market demand in this area. At the same time, however, gross rents as a percentage of income are relatively high in the area (ACS 2012), which would indicate a pressure on supply that this development complex would relieve.

A ULI technical assistance study conducted for the site focused heavily on the lack of attention paid in the Master Plan to economic sustainability and the creation of long-term fiscal independence for the area itself. Indeed, while there is extensive discussion of job training and “employment land”, there is very little detail about what kinds of economic development projects will accompany the development to ensure that the development of the area can keep up with the level of development being taken on by the Jordan Downs

redevelopment initiative. There is no identification of a partnering economic development institution, signaling an institutional capacity problem, and this results in a lack of long-term consideration for the industrial and commercial development for the area. Despite the ambiguity associated with its use, however, the designated employment land offers some of the most promising opportunities for catalytic economic development projects.

While the Watts area generally suffers from low institutional capacity in the area of economic development, there are a number of opportunities to unleash economic potential and a home-grown entrepreneurial spirit that characterizes the Jordan Downs population and its neighbors in the surrounding census tracts (Urban Land Institute, 2009). Moreover, as previously discussed in land use, there is tremendous opportunity to take advantage of the mix of land use zones in the area and to incorporate the industrial/commercial parcels located on the site area, but that are not currently participating in the development. There is also opportunity to help expand and grow the existing commercial and retail enterprises in the surrounding area, thereby incorporating more of the areas pre-existing economic assets into the strategy for long-term success in the area.

The following section will build on this analysis by further detailing the state of economic development at Jordan Downs, discussing the economic vision for the area, and suggesting a number of recommendations and implementation projects that comprise the strategic economic development plan for the Jordan Downs Redevelopment Initiative.

OCCUPANCY STATUS

Occupied Vacant

105.0%

100.0%

95.0%

90.0%

85.0%

80.0%

All Tracts LA County

PART II: Economic Development at Jordan Downs

Primary Challenges Creative Phasing- There are a number of reasons why this development project may suffer unique obstacles, but also offer unique opportunities relative to other development projects throughout US history. While it shares a commonality with many new mix-income affordable housing projects in that it is being redeveloped, not built from scratch, the residents will be relocated on site during construction, which creates unique opportunities and challenges from an economic development perspective. Disruption to community members from construction will be prolonged because of the phasing; however, the retail and commercial space can be developed immediately in part because there will be residents to service from inception of Phase 1. From this perspective, the project has unique revenue and employment generating capacity even before completion.

Experimental Locational Choice- Additionally, while mix- income projects are not entirely new, they are a relatively new experiment for the region, especially in the area selected. A very difficult past has resulted in negative associations with the communities’ level of economic opportunity and general

safety, so incentivizing individuals to move into the market rate apartments may be more difficult given the recent historical development of Jordan Downs. And, while the community has identified some potential employers, there is little incentivizing high skill individuals to move to this community because the jobs do not correspond with their skill level. Moreover, there is extremely low employment on site, and the current strategy to transition a financially dependent population into long-term economic self-sufficiency is underdeveloped.

WATTS TOWERS (PHOTO CREDIT: STUDENT 68)

Community Disinvestment and Regional Decline- Stimulating meaningful employment will also be difficult, as the area must combat chronic disinvestment over the years, and more generally the Los Angeles region has lost many jobs that directly impact the skill level/demographic in the Watts/Jordan Downs area. Fewer large employer

opportunities in the area also have consequences for strategic economic development planning, in that most economic growth must come from small to medium sized businesses. Furthermore, the development will be situated in a largely developed, dense, mostly residential area of Los Angeles. This means that there is little available undeveloped land, so intensive cataloguing of vacant properties will be important for identifying local commercial/industrial redevelopment opportunities.

Diversity- Finally, this community has a diverse population and a mix of foreign and native born residents. The high volume of undocumented individuals (and their informal businesses) on site, however, has made it difficult to estimate the true economic power of the area, further eluding investors (Urban Land Institute, 2009). Unique racial tensions in this community between African Americans and Latinos, which have arisen in part because of conflict over an increasingly limited supply of low-mid skill jobs, will undoubtedly need to be accounted for in this redevelopment initiative.

Primary Opportunities A Community on the Rise- Generally speaking, there are some strong indicators that put this community potentially at the forefront of opportunity. Crime rates are decreasing for Watts and notably in the Jordan Downs community, the schools are showing remarkable improvement after being taken over by PLAS, and a lack of quality amenities in the area signifies good opportunity and ensures little duplication of services. A general dirth of quality services in the surrounding

area will also make this redevelopment attractive, as will the provision of increased affordable housing.

SITE PLAN (SOURCE: MASTER PLAN)

Retail/Commercial Development Center- One very positive opportunity for this development is the retail and commercial development, which will provide much needed services to the community and take advantage of the over 350 million dollar unmet service demand in the area (Primestor, 2011). As demonstrated by the image on page 16 from the Primestor Retail Market Analysis, the location of the new retail in the northeast corner of the development will provide much needed amenities to Jordan Downs residents, and their north- ward neighbors. The population and traffic density of this neighborhood should also prove attractive to national retailers, despite the limiting bounds of the primary trade area

Retail/Employment

and low income of residents (Primestor, 2011). Additionally, the Jobs Resources Center and generally designated “Employment Land” offers valuable opportunities for community-owned ventures, as well as a site for coordinating employment training and job placements.

Culture of Entrepreneurship- Extensive opportunity also lies in what is currently under regulated economic activity, or the “gray economy” in the form of unrealized entrepreneurship and economic potential for small businesses that need legitimization. One of the primary reasons this investment is not being currently made is that there is a large under-ground economy in the area, probably stemming from (1) ) illegal transactions (2) unregulated enterprises (3) undocumented workers running enterprises. As noted in the ULI panel, there is a very strong entrepreneurial spirit in the community of Jordan Downs; however, these activities are not being directed or coached in a way that makes their enterprises more official (read: tax-paying and recognized by outside investors).

Resurgence of the Inner City- Michael Porter highlights the economic opportunity of the inner city in his work, “The Competitive Advantage of the Inner City” (1995). The issue of unrealized purchasing power in the inner city has long been discussed, often in tandem with new trends of the resurgence of the inner city. In Jordan Downs, one of the biggest economic opportunities lies in this resurgence. Around the country we are seeing reversing suburban, “white flight” trends, as people seek to be located closer to downtown and seek to live on transit connections. Moreover, recent and

steadily growing demand for multifamily housing, mix use housing, and the decline of prominence of the single family house positions this development as contemporary and fitting current trends of urbanization. These opportunities are not being realized because this area has not yet been a target of new interest, in part because of the history of crime and poverty that plagues the Watts area.

LOCAL BUSINESSES (PHOTO CREDIT: STUDENT 68)

Neighboring Businesses- Another major economic opportunity for the Jordan Downs community lies in the pre- existing businesses on and around the site, (which include former industrial manufacturing site and a recycling center). If the owners of these parcels can be incentivized to participate in the development there is opportunity to create jobs and economic opportunity in expanded recycling or manufacturing facilities, which can be complemented by a green design program at the high school. The opportunity has not been realized yet because until now, the project has failed to incentivize these non-contributing structures and their owners to participate in the development.

Community Assets In crafting an economic development strategy for the Jordan Downs Redevelopment Initiative it is important to consider the relevant community assets. This recognition of assets is the first step to mobilizing community resources around the objective of improved economic outcomes for residents. The assets of the Jordan Downs community include:

Geographical and Locational Advantages: The Jordan Downs development is located in the center of one of the United States’ most important economies, with transportation connections to the region’s commercial and industrial center of downtown and the trade center of the LA/Long Beach ports.

Designated Employment Lands: While the use of these properties has not been officially determined, the presence of these parcels provides the potential for a vibrant live-work community on the Jordan Downs site.

Non-participating Parcels: The currently non- contributing parcels to the project contain a recycling center and a manufacturing facility. These pre-existing businesses offer valuable tax revenue and opportunity for employment and training collaboration.

Proximity to Thriving Workforce and Business Development Agencies: While the direct area of Watts does not have particularly strong economic leadership, there are some neighboring employment training agencies, and the County of Los Angeles features 7 Workforce Investment Boards, which may prove critical for financing a larger workforce development strategy in Watts.

Young, Entrepreneurial Population: Around 50% of the Jordan Downs community is under the age of 18, providing a potentially rich source of labor for economic development and growth. More importantly, the area reports a high level of natural entrepreneurship among residents, which is promising for new business development.

Cultural, Social and Religious Institutions: Jordan Downs has a thriving public life that includes many families and is facilitated by a wide, diverse range of neighborhood institutions.

Economic Development in the Master Plan The Master Plan gives an important view into how the various aspects of the plan, such as land use and transportation, will function independently and also together. From the perspective of an economic development planner, the Master Plan is successful at integrating revenue generating property into the development. There are various parcels that have been designated for employment uses of various types, which will complement the housing development well.

At times, however, a major weakness of the Master Plan is economic development and its disconnection from some aspects of the plan. While there was continuous mention of workforce development programs in the “Human Capital” section, and the plan did indeed cite a number of local and regional potential employers, it seems insufficient to fill the need of the residents, especially given the poor employment prospects in nearby areas. There are two potentially revenue and job creating parcels that do not seem to be considered,

and these non-participating parcels are rarely addressed in the Plans in a meaningful way, which is not positive given their potential to disrupt the project and the environment the project seeks to create. The plan also tends to promote the concept of sustainability as it relates to health and environment, but does not extend principles of sustainability to the economic plans for the area.

Community Outcomes: Rebuilding Jordan Downs It is critical that any economic development strategy for Jordan Downs emphasize job creation and pathways to economic independence for residents. Currently, the economic development strategy set forth by the plan emphasizes job readiness—but it is unclear where these jobs

does not stratify residents by their occupation. Additionally, an economic development strategy can guide industrial and commercial development in the area, so that all new or infill development projects maximize the potential for useful industrial clusters and exploit economies of scope and scale.

From Past to Present: Lessons from Public and Mix-Income Housing

will be. To ensure long term economic self-sufficiency and retention of current residents, it is critical to think about immediate job creators for the community. In drafting a strategy around job creation, and by thinking ahead about job creation, the community can plan for an industry/sector opportunity that will match the employment needs of the community, that it is feasible, and that it can eventually grow to offer a range of employment opportunities that will fit the needs of a multi-income community.

Additionally, there is always the well-known risk of gentrification when new development projects are introduced into an area. In order to avoid this problem, an economic development strategic plan can account for community ownership, and can advocate for planning for industries that will service the range of job skills available in the area. This is especially critical for a mix-income project to succeed that

Public housing is an obstacle confronted by local, regional, state and federal governments around the world. Before proposing a more detailed economic development strategy for the community at Jordan Downs, it is important to first review the history of public and mix-income housing developments in the United States. The following historical overview serves to inform the site-specific analysis as to the challenges associated with this type of redevelopment, and provides some analogous examples to draw lessons from.

Public Housing in the United States Public housing projects have had a history of difficulty in facilitating residents achieving prosperity and economic self- sufficiency; this is largely a result of the fact that most public housing projects have generated social and economic network isolation for their residents, thereby limiting financial self- sufficiency and increasing the concentration of poverty.

There is another large, but somewhat hidden problem in the dynamics of public housing and long-term economic welfare, which lies in the issue of the “cycle of poverty”, or inter- generational poverty. While originally conceived as temporary, most public housing became permanent for certain key demographics and families, notably African Americans and more recently Latinos. In particular, African Americans were often placed in public housing post-WWII, at the same time that many predominantly white veterans were returning and taking advantage of generous GI bills and national housing policies, leading to the accumulation of assets for one group and the loss of assets to another. This

(LEFT TO RIGHT) - AERIAL VIEW OF

ROBERT TAYLOR HOMES, CHICAGO

(PHOTO CREDIT: SKYSCRAPECITY.COM); JORDAN

DOWNS AERIAL VIEW (SOURCE: MASTER PLAN)

analyzed above. Segregated and away from the city, the Robert Taylor homes were built in a similar fashion to the Jordan Downs project, but on a much larger scale. The apartment buildings were isolated in the south side of the city in block style formation, leading to similar issues shared by Jordan Downs residents

was in turn exacerbated by the issue of red-lining. Because public housing never functioned in the temporary manner in which it was originally conceived, these projects contributed enormously to the cycle of inter-generational poverty through the issue of inter-generational asset inequality (Conley, 1999), which characterizes the phenomenon of differences in asset accumulation dictating the relative and unjust economic outcomes of American youth.

The Robert Taylor homes, which are often cited as an example of failed public housing, illustrate many of the failures

such as poor sight lines and a general lack of safety embedded into the built environment. Originally hailed as a hall mark of the great American Life, these buildings were constructed as a temporary solution for families that needed time to get on their feet and realize economic independence; however, the geographic isolation and lack of connection to employment generators destined this community for failure. Before it was destroyed, field researchers discovered that many residents had spent upwards of thirty years in these homes (Venkatesh, 2000).

Key Finding: One of the most important takeaways from the Robert Taylor homes, and others like it, is that public housing projects are often destined to fail unless they are meaningfully connected to employment areas. Without a route to economic self-sufficiency, public housing projects tend to feed into cyclical poverty rather than disrupt it.

Mix Income Conversion Converting public housing projects into mix-income developments has become an important trend in the sphere of social housing. The trend is largely built on a philosophy that mixing incomes will reduce stigmatization of public housing, especially because all tenants are living in the same type of housing, regardless of socio-economic difference, thus mitigating the image of public housing as neglected and crime- ridden. Furthermore, the idea of mixing incomes is intended to democratize the economic and social networks in the project area, disrupting negative social and economic networks and introducing new opportunity for residents.

A number of these projects have taken place around the country, and while there has been substantial celebration of their success there are also important lessons to be learned for the Jordan Downs community. Of primary importance is the issue of stigmatization, and how stigmas have been found to live on even after the relocation of families into mixed income communities. Residents in mix income Chicago projects reported that while the stigma of living in public housing subsided, they experienced new and intensified stigma. One study remarked that many residents felt a negative response from higher-income residents, and that the

strict screening and rule enforcement amplified a sense of difference among residents, especially as lower-income residents were targeted (McCormick, Joseph & Chaskin 2012).

Results from another study reflect more general attitudes that have evolved around welfare culture since the inception of public housing, and highlight the potential negative social issues that result from employment discrepancies in a culture where “employment is considered a pre-requisite right to claiming government benefits” (Fraser, Chaskin & Buzuin, 2013). Furthermore, there has been no evidence that demonstrates that living in a mixed-income environment breaks the poverty cycle, moves people into the workforce (Chaskin et al., 2012), or removes social barriers (Chaskin and Joseph, 2011, 2010; Kleit and Manzo, 2006)

As noted earlier in this report, the Master Plan documents do not provide very rich material that delineates how the economic transformation of the Jordan Downs community is going to happen. The ULI technical panel observed repeatedly that homes will not catalyze transformation, that there must be some economic catalyst that accompanies this project, and as we have seen this has been true for many projects that hoped to achieve neighborhood transformation through the provision of new housing, public or market rate. This review of public housing should highlight the importance of an economic development plan that will offer immediate employment opportunities for low-income residents so that they may begin the transition into work prior to upper-income residents moving in. Furthermore, there is a difficult task of incentivizing economic opportunities that provide jobs for a

range of skills and wages—this is a critical element of a successful mix-income community. Unless there are opportunities for all people on the income spectrum, Jordan Downs will have a difficult time attracting the right mix of residents.

POLL FROM THE JORDAN DOWNS RESIDENTS CONFIRM RECENT TRENDS IN

PUBLIC HOUSING DEVELOPMENTS (SOURCE: HUMAN CAPITAL PLAN)

Key Finding: This review sheds important light on the project at Jordan Downs, and how economic development planning will be a critical strategy in mitigating potential feelings of socio-economic tensions and differences that can result from a community environment in which some individuals feel that their work is subsidizing the non-work of others (currently only 24% of residents indicate they are employed). Mix- income developments will be most successful if everyone in the development who wants to be income producing is income producing.

The Strategy: Economic Development at Jordan Downs

The Vision for Jordan Downs A major emphasis of this development project has been providing residents with the services they need, whether the services relate to mental health or the availability of high quality retail. As such, the economic development vision for Jordan Downs should be responsive to the needs of the community as well, while simultaneously promoting economic self-sufficiency and long-term, sustainable growth.

Throughout a number of studies the most commonly reported concern of residents pertains to the lack of current employment availabilities and opportunities. At the same time, the majority of the population is under 18, providing a potentially large pool of trainable workers to stimulate growth and development in the area. As such, the economic vision set forth for Watts in this document has been constructed to emphasize the recognition of community-based entrepreneurship, the need for direct job creators and job readiness programs, and the importance of connecting these developments to the local education system, notably Jordan High School.

Economic Development Objectives

Stimulate private investment while promoting community ownership

Facilitate growth without displacement to achieve goal of development

Build institutional capacity for community-based

economic change

Ensure the long-term organizational management and coordination of economic development projects/activities in the area

Create revenue and employment generating opportunities on the Jordan Downs site

It is critical that the Jordan Downs Master Plan maximizes job creation opportunities, as this is the primary concern of its residents

Recommendations To achieve the economic development objectives delineated in this report, and to facilitate the creation of a long-term economic development strategy for the Jordan Downs Redevelopment Initiative, the following recommendations are set forth:

Create a Community Development Corporation. It is widely observed in economic development theory that there are two primary aspects of economic development, resources and capacity (Blakely & Leigh, 2010). Often economic development planners focus on resources (such as

human capital, natural resources, location, entrepreneurial climate, etc.) but fail to consider the multiplying effect of resources when there is strong institutional capacity to develop and coordinate these resources.

Currently, the Jordan Downs Redevelopment has a number of resources at their disposal, including a large supply of labor, entrepreneurship, and proximity to large markets across southern California. The Jordan Downs community, and Watts more generally, does not have the capacity to work with all of its resources. This observation initially came out of the analysis of the Master Plan, and was confirmed during a client interview with Kevin Rodin, who indicated regretfully that there was no partnering economic/community development institution and non-profit involved in the project. While health non-profits in the area had been collaborative with social services provision, he said, there is low institutional capacity in the area in terms of economic development.

Implementation partners include: Watts Community Studio, Local Churches and Civic Organizations, West Angeles Community Development Corporation, Watts Labor and Community Action Committee (WLCAC)

Turn the Jobs Resource Center into a Revenue and Employment Generating Space. A number of independent surveys of the community demonstrated that the overwhelming pre-occupation of residents is with job availability and job training. This strategy proposes utilizing that space more effectively by dividing up its uses to be more productive. The recommendation is to

subdivide the Jobs Resources Center by a first and second floor.

SITE PLAN FOR COMMERCIAL CENTER AND JOBS RESOURCES FACILITY (SOURCE: MASTER PLAN)

The first floor should be reserved for one or many community- owned and operated retail/food services enterprises— operations that directly employ residents, serve as training grounds for nearby high school students, and create direct lines of community investment in the economic success of the redevelopment. This is important as analyses of mix-income project point to the importance of community ownership and participation in directing and sustaining economic success in the area (Schubert & Thresher, 1996). The second floor of the Jobs Resources Center could be turned into a set of offices or other commercial spaces. The new community development corporation could house itself in an office designated on the

second floor—other offices could be used as co-work and training spaces and small business incubators.

Potential implementation partners include Michaels Group and BRIDGE Development partners, Jordan Downs residents

Establish a Small Business Development and Information Center. In a community survey conducted by the Watts Studio, a non- profit group in the area, 75% of the 700 residents surveyed identified business development information and mentorship as a leading choice when asked about program development (Watts Community Studio, 2014). By utilizing a range of free business development services that are offered around the Los Angeles area, the co-work space suggested in Recommendation #2 can be used as a training facility for community members hoping to expand their current business or to legitimize the pre-existing businesses that are informally operated as part of the “gray economy”. Moreover, using the retail study as a guide for what retail services are most needed in the community, Jordan Downs can focus on nurturing smaller establishments, especially since the site cannot support a big box retailer (Primestor, 2011).

Potential implementation partners include business and entrepreneurship-based non-profits in and around Los Angeles (Los Angeles Urban League, SCORE for greater Los Angeles), higher educational institutions in business administration and finance (USC Marshall School, UCLA Anderson School), current businesses in the Watts area, Jordan Downs residents, Los Angeles Economic Development Corporation

Jobs Resource

Center

Create a Community Development Finance Institution. In order to take advantage of the entrepreneurial spirit in the Jordan Downs area, this strategy also includes the creation of a community development finance institution (CDFI). CDFI’s can take many forms, but generally serve the function of providing credit and financial services to underserved population. There are a number of ways that this tool can be used to complement the activities of the community development corporation, for example by taking the form of a micro-enterprise development loan fund.

Potential implementation partners include Los Angeles LDC (CDFI), Opportunity Finance Network, US Department of Treasury

Collaborate with Leading Industry Groups and Associations to Build Worker Pipelines. One of the primary foci of the Master Plan as it pertains to economic development was job training and employment readiness. The Master Plan identified a number of strategies to improve the skills training for the residents at Jordan Down, namely through the collaboration with local employers and workforce development/training centers. A critical strategy to enhancing potential jobs outcomes for workers will be forging meaningful professional connections between the job training services, Jordan High School, and the large industry groups around Los Angeles and the state. Many of these organizations, such as the California Network for Manufacturing Innovation, provide useful, industry-specific jobs training. At the same time, these organizations possess strong connections to the local employers in those industries

and know what skills the employers need. By increasing network collaboration in key targeted industries and creating formal worker pipelines, it will be possible to improve the placement of residents after they receive training. Moreover, by involving industry associations there can be increased compatibility between training services offered and the actual jobs that are available.

Potential implementation partners include: industry associations (aerospace, manufacturing, renewable energy, fashion production and manufacturing, etc), employment training facilities and non-profits, large local employers

Develop and Implement a Land Banking System. One of the primary problems with generating new employment and economic activity in the area is that there is a limited supply of available land for new or redevelopment. This is problematic in part because it is impossible to attract or expand business if it is perceived that there is nowhere to go. By developing a system for monitoring vacant land (including foreclosed on properties or properties that have other development obstacles), the economic development corporation can turn these properties into revenue-generating opportunities for commercial and economic development

while mitigating the negative externalities of underutilized property.

Potential implementation partners include Los Angeles Department of City Planning, County of Los Angeles Planning Commission

Incentivize Participation of Currently non-Participating Parcels

RECYCLING CENTER ON SITE (PHOTO CREDIT: STUDENT 68)

Under the current Master Plan there are two parcels, a former manufacturing facility and a recycling center, that are not being utilized as part of the redevelopment. It would be worth investigating various methods for incentivizing their participation (through tax breaks, public-private development partnerships, for example); as they currently stand, both businesses are a threat to the overall aesthetic being sought by the developers. But both of these businesses, if upgraded

FORMER MANUFACTURING FACILITY AND CURRENT WAREHOUSE ON SITE (PHOTO

CREDIT: STUDENT 68)

and expanded, have the potential to provide a valuable source of nearby employment and job training for residents.

Recycling Centers are useful businesses for employment because they are labor intensive, social useful endeavors that often serve to catalyze other economic opportunities (Blakely & Leigh 2010). The current warehouse/former manufacturing site, if utilized or acquired, could prove useful as a hands-on training facility for a number of emerging industries in Los Angeles, such as advanced manufacturing. Through a partnership with a school, for example, the provision of such a facility could be an asset that leads to the designation of the school as a specialized training center, while simultaneously providing a site for skills upgrading for older community members seeking workforce training.

Potential implementation partners include: City of Los Angeles, two operating business owners of the parcels, Michaels Organization and BRIDGE Development partners, Jordan High School/LAUSD, Maxine Waters Employment Prep Center

Metrics and Evaluation Evaluation is an important part of any economic development strategy. Maintaining a consistent set of evaluative metrics and measures not only sheds light on whether or not program objectives are being met, but also facilitates consistent and cohesive measurement.

There are basic measures that will help monitor progress, including unemployment, labor force participation, educational attainment, poverty status, household and per capita income. These measures can be taken periodically from census data, for example by using the American Community Survey, and inform the general socio-economic progress over time. There are also more creative metrics that can be used to measure whether or not the economic development objectives set forth in this document are being met. As a reminder, the objectives are:

Stimulate private investment while promoting community ownership.

Build institutional capacity for community-based economic change

Create revenue and employment generating opportunities on the Jordan Downs site

In order to evaluate the progress toward these particular objectives, it will be important to measure private investment

in number of dollars into the area annually, as well as a measurement of what percentage of that investment came from what kinds of investors (including individuals or businesses inside of Watts vs institutional investors, etc.).

Generally, it will be important to evaluate how the retail/commercial portion of the development is faring by keeping detailed records about the number of new tenants, time it takes to attract new tenants and length of tenure. Sales tax can be used to better estimate the revenue generating capacity of establishments. To measure the progress it will also be critical to analyze information about new business creation in and around the site, and to keep profiles on who the new business owners are (i.e. previous existing enterprises that are relocating to the retail center, resident-owned enterprises, etc.). In order to establish to what extent these businesses are impacting employment, it will be necessary to keep detailed measurements of how many positions are created or maintained each year.

In addition to measuring private investment and business creation, it will be important to periodically evaluate the success of the jobs training aspect of the Human Capital plan, which will help inform the efficacy of the training programs. Critical measures include the number of consultations given each year, the number of job placements made on a monthly basis, and to consistently monitor where the individuals are being placed so that employers who are taking on residents can be approached for improved information on needed skills. It will also be essential to measure how many new industry organizations, associations, and employers are brought into the jobs placement network each year.

Measuring the institutional capacity for community-based change will require careful identification and monitoring in the area of organizations that can help strengthen the economic fabric of the Jordan Downs redevelopment initiative. This includes maintaining catalogues of the various organizations that are involved and consistently evaluating whether or not their agreed upon contributions are being met, and identifying where there may be underutilized capacity in these organizations.

As the project continues to develop, these measurements and evaluative metrics can facilitate year to year improvements in terms of investment, business creation, employment generation, and institutional change. As the institutional capacity grows and economic coordination improves, the change will be steadily reflected in more dollars invested into the area, the legitimization of exisiting businesses and the creation of new resident-owned enterprises, the upgrading of surrounding businesses into bigger employment generators, and the steady increase in revenue generated from the retail/commercial component of the development.

Why These Recommendations? The recommendations and overall strategy set forth in this report are intended to complement and build upon the current framework for initiating economic change in the Jordan Downs redevelopment. Without utilizing many of the recommended economic development tools, there are opportunities that may never be realized, like the provision of resident-owned enterprises to ensure community ownership in driving and sustaining economic regeneration in the area.

The most important recommendation is the development of a community development corporation, and more generally that the area needs to improve institutional capacity for economic development. A core institution is critical to developing and maintaining the redevelopment’s economic vision, coordinating a large range of economic actors and participants, ensuring community-based ownership over economic redevelopment, and effectively monitoring how projects and activities are working together to produce enhanced economic opportunities and outcomes for Jordan Downs current and future residents.

The subsequent recommendations are intended to be a set of strategies, tools and projects that can be placed under the purview of the community development corporation. Without these tools and strategies the development risks missing an opportunity to transition the current residents into employment and revenue generating ventures even before the upper income residents move into the completed market rate apartments. Moreover, the development risks perpetuating a culture of unemployment, low labor force participation, and financial dependency. Alternatively, such a new and high profile development risks displacement of current residents who cannot keep up with the pace of development in the area.

Conclusion: Re:Working Jordan Downs

Jordan Downs is a community with the potential to benefit

enormously from this cataclysmic, mix-income redevelopment

project. Promoting principles of livability, equity and

sustainability, the Jordan Downs Master Plan re-envisions this

traditional public housing community as a place of positive

change and development.

To ensure the long-term viability of this plan, it is critical that

the economic development aspect of this plan is enhanced

and thoroughly connected to the decisions made and

opportunities available in other elements of the plan, notably

transportation and land use. Los Angeles’ transit revolution

will continue to increase connectivity to Watts from other

areas of Los Angeles, providing valuable opportunities in

employment. At the same time, unique land use in this area

poises this development to be an example of successful live-

work community that generates both revenue and

employment. With a young population that is ripe for training

and workforce preparation, Jordan Downs is also endowed

with a unique human capital potential that must be cultivated

and guided to avoid underutilization. Much of the economic

opportunity that awaits Watts residents lie in these unique

land use and transportation aspects of the Master Plan and

unleashing the economic potential of Jordan Downs residents,

which this report intentionally built off of.

In order for the Jordan Downs redevelopment initiative to be

successful it will be important to consider how the

community’s economic and social resources can be mobilized

to achieve community-based, enhanced outcomes and

opportunities. To better facilitate cohesive development and

to maximize the potential of the Jordan Downs future growth,

a number of recommendation and strategies have been

outlined in this report that promote community ownership,

investment, and job and revenue generating activities under a

framework of improved institutional capacity for economic

change.

Works Cited Social Explorer Tables: ACS 2008 to 2012 (5-Year Estimates) (SE), ACS 2008 -- 2012 (5-Year Estimates), Social Explorer; U.S. Census Bureau

Schubert, M. F., & Thresher, A. (1996, April). Lessons from the Field: Three Case Studies of Mixed - Income Housing Development [Scholarly project]. In University of Chicago- Illinois. Retrieved from http://uic.edu/cuppa/gci/publications/workingpaperseries/pdfs/ Lessons%20from%20the%20Field.pdf

Fraser, J. C., Chaskin, R. J., & Bazuin, J. T. (2013). Making Mixed- Income Neighborhoods Work for Low-Income Households. Cityscape: A Journal of Policy Development and Research, 15(2), 83-100. Retrieved from http://www.huduser.org/portal/periodicals/cityscpe/vol15num2

/ch6.pdf McCormick, Naomi, Mark Joseph, and Robert Chaskin. 2012. “The New Stigma of Relocated Public Housing Residents: Challenges to Social Identity in Mixed- Income Developments,” City and Community 11 (3): 285–308

Joseph, Mark, Robert Chaskin, and Henry Webber. 2007. “The Theoretical Basis for Addressing Poverty Through Mixed-Income Development,” Urban Affairs Review 42 (3): 369–409

Kleit, Rachel, and Lynne Manzo. 2006. “To Move or Not To Move: Relationships to Place and

Relocation Choices in HOPE VI,” Housing Policy Debate 17 (2): 271–308.

The Watts Community Studio (Publication). (2013, July/August). Retrieved http://wattscommunitystudio.files.wordpress.com/2014/01/wcs

-final-report.pdf Blakely, E. J., & Leigh, N. G. (2010). Planning local economic development: Theory and practice. Thousand Oaks, Ca.: Sage.

Conley, D. (1999). Getting into the Black: Race, Wealth, and Public Policy.Political Science Quarterly, 114(4), 595-612. doi: 10.2307/2657785

Venkatesh, S. A. (2000). American project: The rise and fall of a modern ghetto. Cambridge, MA: Harvard University Press.

Urban Land Institute: An Advisory Services Panel Report: Jordan Downs, Los Angeles (Rep.). (2009). Washington D.C.: Urban Land Institute.

Primestor Retail Market Analysis: Jordan Downs (Rep.). (2011). Primestor.com.

Multi-family Market Forecast 2013 Report (Publication). (2013). Los Angeles, CA: USC Lusk Center.

WRT Solomon . (2010, December). Envision Watts: Envision Jordan Downs [Community-Based Master Plan for Jordan Downs].